Italie

7th Festival of Economics in Trento, Italy, 31 May-3 June 2012

Life cycles and intergenerational transfers

Trento/Rovereto, Italy, 31 May-3 June 2012

This seventh edition of the Festival gave a special attention to institutions which rather than operate redistributions from the young to the old, make transfers in the opposite direction, from older people to the young. Schools are one such institution – this is why they received special attention in this year’s Festival. Much was said about entering the workplace and on-the-job training. Last but not least, the Festival examined the informal intergenerational pacts that are so important in the field of assisting dependent persons, for example elderly parents who help care for grandchildren or children who care for their aged parents.

The OECD LEED Trento Centre, in cooperation with the School on Local Development of the University of Trento, organised a round-table session on:

Divided we stand: Why inequality keeps rising

Friday 1 June from 11.00 to 12.30

OECD Trento Centre, Vicolo S. Marco, 1, Trento

The round-table addressed questions arising from the consideration that rising income inequality creates economic, social and political challenges. It can stifle upward social mobility, making it harder for talented and hard-working people to get the rewards they deserve. Intergenerational earnings mobility is low in countries with high inequality such as Italy, the United Kingdom, and the United States, and much higher in the Nordic countries, where income is distributed more evenly (OECD, 2008). The resulting inequality of opportunity will inevitably impact economic performance as a whole, even if the relationship is not straightforward. Inequality also raises political challenges because it breeds social resentment and generates political instability. It can also fuel populist, protectionist, and anti-globalisation sentiments.

People will no longer support open trade and free markets if they feel that they are losing out while a small group of winners is getting richer and richer.

The implications for education policies are clear. Education policies focusing on equity in education may be a particularly useful way for countries to increase earnings mobility between generations and reduce income inequality over time.

The session tried to answer, among others, to the following question: How can education help tackle rising income inequality?

The round-table speakers were:

Sergio Arzeni: Director of the Centre for entrepreneurship, SMEs and local development of the OECD.

Bruno Dallago: Dean of the Faculty of Sociology and Director of the School for Local Development at the University of Trento.

OECD report released: it is necessary to start from early childhood education and teachers play a fundamental role

COMBATTING INEQUALITIES: INVEST IN A QUALITY EDUCATION

“Divided we stand: Why inequality keeps rising?”. In the last thirty years, inequality has increased in all OECD countries, even in those better performing countries such as the Scandinavian countries. There are many causes including: globalisation, changes within families and reductions in wages. The most harmful is that related to discrepancies between the competencies and skills held by jobseekers and those skills and competencies actually demanded by firms. This is the context in which the OECD report on inequalities was developed, and presented in the morning session of the 2012 Festival of Economics held at the Trento Centre.

How to react amid such a negative trend? According to the OECD, there is no single ‘recipe’, but the way out is to invest in people and in quality education. Barbara Ischinger, Director of the OECD’s Directorate of Education explained how actions must start from early childhood education and how teachers perform a crucial role. With regard to this, she provided examples of schools which are performing well due to their low, or even nil, level of school dropouts. “In this case”, explained the Director, “teachers, knowing the students and realising from the beginning their deficits, give them special assistance”. Still in relation to the teacher’s role, Barbara Ischinger explained: “aside from providing generic skills such as how to read, write and count, teachers have to help children be creative, help them analyse problems and be flexible, because future occupations will be characterised by flexibility”.

Bruno Dallago, Dean of the Faculty of Sociology at the University of Trento, presented the social and historical context studied by the OECD report: “inequalities represent the central problem of the current crisis. In our country, the situation is not so critical yet, but the crisis has been exacerbating it. Preparing new generations is fundamental. The educational approach must be that of problem solving, it is necessary to teach how to learn and how to interpret problems”.

Sergio Arzeni, Director of the OECD Centre for Entrepreneurship, SMEs and Local Development in Paris, concluded by reflecting on comparable data with other European countries, highlighting good examples such as the German dual system and the Netherlands’ investment in early work experience (at 14 years old) which has led it to have amongst the lowest youth unemployment rate in Europe.